The Decision to Build or Buy Management Software in the Health Care Industry

The decision to “Build or Buy” management software in the Health Care Industry is a huge step in the process towards greater organizational efficiency. Decision makers for hospitals, medical centers and health plans must make this choice for a wide variety of software types including but not limited to: Contract Management Software, Billing and Invoicing Software, Customer Relationship Management Software, Human Resources Software, or Identity Management Software. Regardless of what system you’re looking to implement, it is important to recognize the advantages and disadvantages of a home-grown versus a commercial solution.

The goal of implementing new software is ultimately to increase user productivity. Whether to construct the software internally or to purchase the software from a vendor should be based on maximizing this increase in productivity. Does building a new system focus on your organization’s core competencies? Are you factoring the actual time it will take to build the software into the cost comparisons? Will an off-the-shelf software solution bend enough to meet your organization’s requirements? Can the product handle healthcare industry specific tasks; such as managing the lifecycle of vendor, provider, payer, and facility agreements? Will the product be HIPAA and HITECH compliant? These questions and more should be heavily evaluated before reaching a final judgement on whether to build or whether to buy.

Electing to build a new software solution should be based on some or all of the following elements:

The software your company is building is a solution capable of solving the problem your organization has.

Building the software is economically feasible from a cost and time perspective.

The search conducted for a commercial software alternative did not produce any viable candidates.

Alternatives available for purchase are not able to be personalized to the Health Care industry’s vernacular, processes and compliance needs.

Electing to buy a new software solution should be based on some or all of the following elements:

The software your company is buying is a solution capable of solving the problem your organization has based on your own research, user reviews, and Health Care references.

Buying the software is economically feasible.

Access to a dedicated support staff, with people whose job it is to be knowledgeable about the particular software system, is essential to your organization.

The software your company is purchasing is able to be personalized to the Health Care industry’s vernacular, processes and compliance needs.

The vendor offers software that can be SaaS (cloud-based) or installed on your infrastructure.

Like many business decisions, whether to “Build or Buy” software solutions, such as Contract Management Software, are dependent on a multitude of factors. Free market competition promotes innovation which means that many commercial software systems will have features your organization could never create in-house. However, no one knows your organization’s problems, procedures, and lingo like your organization does. The way to get something done right may be to do it yourself, but don’t let that stop you from getting something even better.